Three Simple Tips for Improved Financial Awareness

catherineredmayne0
1 day ago
5 min read

During my first few internships and early jobs, I noticed that the money I earned seemed to disappear almost as quickly as it arrived. Looking back, most of that “lack of control” came down to a lack of awareness rather than a lack of discipline. Below are three habits that helped me build a clearer picture of my finances and stay on track toward my goals; after all, scientia potentia est – knowledge is power.

1. Know Your Monthly Inflows and Outflows

There’s a version of a common saying that applies well here: if you’re avoiding your bank balance, that’s usually the clearest sign it’s time to check it. Building the habit of looking at your account every so often – not obsessively, just once every couple of days – keeps your financial position and goals front of mind.

An important note: try not to let that number carry an emotional charge, or let it define your sense of success or capability (easier said than done, I know). Your balance is simply a data point: a single moment in your financial journey, not a verdict on it.

2. Know Your Spending Priorities

Plenty of personal finance advice defaults to strict, category-based budgets or spending “buckets.” What often goes undiscussed is how overwhelming that can feel to set up all at once – even before you get to the harder question of how much to allocate where. A simpler starting point is to reframe your priorities before you reframe your budget.

Getting clear on what you actually value spending money on (and what you don’t) makes it easier to judge what’s “worth it” in the moment, rather than defaulting to impulse. Here are two methods I rely on to stay accountable.

a. Save vs. Splurge Lists

One approach is to build a “save vs. splurge” list: a simple record of where you’re happy to spend and where you’d rather hold back. These categories/items can be as specific (or as “small”) as you like; the point is to reflect honestly on your life and keep some balance across both columns. For example:

Save	Splurge
Buying coffee out	High-quality clothing
Car ride apps	Kitchenware
Food delivery	Experiences
Getting nails done	Pilates classes

There’s no universal right answer here, only what matters to you. When you’re feeling torn about a purchase, this list gives you something to fall back on. It’s also worth remembering that priorities shift over time — that’s normal. The goal is simply to keep both columns in balance, so you avoid lifestyle creep while still leaving something over to save or invest.

b. Needs vs. Wants

A second list worth building is a “needs” vs. “wants” list — essentially a simplified budget that keeps you focused on what actually matters and limits frivolous spending. High-quality clothing, for instance, might be something you genuinely value — but that doesn’t mean buying every piece that catches your eye. Instead, that item goes on your “wants” list, where you can weigh it against genuine needs without the pressure to buy immediately. For example:

Needs	Wants
A new monitor (for work)	New book
Socks	Wireless headphones
Toothpaste

You can extend this into separate short- and long-term lists, or combine both into a single matrix:

	Needs	Wants
Short term (or small)	Toothpaste, socks	New book
Long term (or larger)	Monitor (for work)	Wireless headphones

As with the save/splurge list, there’s no single right way to do this — use whatever structure works best for you.

3. Know Your Financial Timeline

Once you have a handle on your financial position and priorities, the final piece is understanding your “financial timeline.” This builds on the first tip with more nuance: the goal is what economists call consumption smoothing — maintaining a stable standard of living over time by saving more during periods of high income and drawing on those savings during leaner ones.

This shows up in different ways. Rent, bills, and other recurring costs often cluster at the start of the month. Or perhaps your income itself fluctuates — some industries see genuine seasonal highs and lows in demand, and pay follows suit. Either way, certain stretches will feel tighter than others. Understanding your own rhythm in advance is what makes it possible to smooth through them.

a) Learn to Anticipate the Highs and Lows

Consumption smoothing depends on recognizing your own highs and lows before they arrive. That means knowing your recurring payments — what they are, when they’re due, and roughly how much they’ll cost — so you can plan ahead and save accordingly.

I find it useful to think of this like a reservoir. Rain feeds a river that wants to flow at a constant rate — too little, and the riverbed dries out; too much, and the banks flood. The rain itself is irregular: some stretches bring weeks of steady rainfall, others go dry for a month at a time. When the rain is heavy, we want to build reserves — saving or investing more. When it’s scarce, we draw on those reserves, much like releasing water stored from the last rainy season, so the flow continues even through dry spells.

b) Keep a Detailed Financial Tracker

As a self-proclaimed spreadsheet enthusiast, this is my personal favourite. Each month, I keep a sheet tracking every expense, which feeds into a yearly summary broken down by category. For example:

note: the above image is a mock up using the template I made (and love to use!)

You can build this out by importing transactions from your monthly bank statements, or by logging them as you go — I prefer to set aside a few minutes at the end of each week, which also gives me a chance to check my progress and set goals for the week or month ahead. The same structure works well for tracking your needs-and-wants lists and how much you’ll need to save toward a given purchase.

If you’d like a head start, I’ve linked the page where you can purchase the financial tracker I built myself and use every week here.

c) Let Your Banking App Do Some of the Work

If building your own tracker feels like a lot to take on, many banks already do this for you. J.P. Morgan Chase, for instance (not sponsored), provides a monthly spending summary broken down by category — shopping, groceries, and so on — directly in its app. These built-in visuals are a solid starting point for understanding your general spending patterns.

One caveat: since your bank is categorising these expenses on your behalf rather than you doing it yourself, its categories may not always line up with how you’d naturally group your own spending — worth a quick sanity check now and then.

Those are the three habits that have done the most for my own financial awareness. My hope is that even adopting one or two of these can help you get a clearer sense of where you stand, where you’re headed, and what it will take to get there. Good luck!

The Everyday MBA